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Expansion On The Horizon?

Will Sun Cruises be the first tour- operator-owned cruise line to take the plunge and actually build its own vessels instead of buying them second-hand? Rumors to that effect were stoked by an advertisement placed by Sun Cruises this May seeking a new technical manager capable of “managing all technical aspects of new-builds.”

When asked about the company’s development plans, Managing Director Frank Pullman declined to comment, stating through a spokesperson that such issues were too “sensitive” to discuss.

Sun Cruises’ existing fleet is comprised of four ships: the 1,172-passenger Carousel, 904-passenger Seawing, 1,402- passenger Sunbird, and 1,257-passenger Sundream. As in previous years, Sun
Cruises has positioned its ships during 2002 in the Mediterranean, Northern and Western Europe, the Canaries and the Caribbean.

Sun Cruises continues to operate the 1971-built Seawing this year, however, Royal Olympic Cruises (ROC) has signed a lease-purchase deal signaling the ultimate disposal of that vessel. Sun Cruises will bareboat charter the Seawing to ROC, and Sun will in turn charter the vessel back from ROC 240 days per year for five years. At the end of the fourth year (2005) ROC will have the option of purchasing the Seawing for a nominal sum. The Seawing transaction arose after Sun Cruises’ parent - My Travel (formerly Airtours) - purchased U.K. tour operator Direct Holidays, which had prematurely cancelled its charter of the ROC vessel Apollon.

Posting revenues in excess of five billion pounds in fiscal year 2001, the MyTravel Group now owns an extensive portfolio of tour operators, hotels, airlines, and travel agencies throughout Europe and North America (including one of the largest travel-agency holding companies in the U.S., Travel Services International).

While possibly entertaining growth plans for its Sun Cruises subsidiary, the MyTravel Group has significantly decreased its investments in the cruise sector overall during the past year. In mid- 2001, it sold its 50 percent interest in Costa Crociere to Carnival Corporation; at the same time, Carnival sold its 26 percent stake in MyTravel.

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